Unbalanced budget could lead to cuts, special sessions

Bernard Schoenburg

Wednesday

Jun 25, 2008 at 12:01 AMJun 25, 2008 at 4:14 AM

Gov. Rod Blagojevich announced Tuesday that he’ll make $1.5 billion in painful cuts from the $59 billion state budget for the fiscal year that begins July 1 unless the legislature approves ways to raise more money.

The stage has been set for another long, hot summer in Springfield.

Gov. Rod Blagojevich announced Tuesday that he’ll make $1.5 billion in painful cuts from the $59 billion state budget for the fiscal year that begins July 1 unless the legislature approves ways to raise more money.

The cuts could include “significant reductions in staffing throughout state government at agencies such as the Department of Natural Resources, Department of Human Services, Department of Corrections and others,” a statement from the governor’s office said.

There also could be more than $600 million in health-care cuts, including even-lengthier delays in Medicaid payments to hospitals and pharmacies; increased workloads for child-welfare caseworkers; elimination of $150 million in school construction grants; and the loss of $28 million in Amtrak subsidies.

But Steve Brown, spokesman for House Speaker Michael Madigan — who has refused to personally attend recent budget meetings Blagojevich called — said he heard “nothing really new” from the governor, and the revenue-producing bills Blagojevich wants the House to pass continue to have “huge defects.”

The governor didn’t call a special session of the legislature, as he did nearly 20 times last year, but said he wanted action by July 9, after which he’d use his “constitutional authority” to make the cuts he said would cause “pain and harm.”

Brown said the House is scheduled to meet next in veto session in the fall, and he questioned what authority the House would have to convene itself before that time.

He did say some of the “special sessions that the madman called last year” remain technically open and could be used to convene House members.

David Dring, spokesman for House GOP Leader Tom Cross of Oswego, said the state Constitution allows House and Senate leaders to jointly call a special session.

“This is just another example of what happens when Democrats are running the place,” Dring said. “They don’t communicate. They’re dysfunctional.”

Senate ‘did its job’

Blagojevich said the Senate did its job before adjourning May 31 by passing bills to expand gambling, lease most of the state lottery, allow $530 million in transfers out of various state funds, issue $16 billion more bonds to shore up state pension plans, and spend money from a proposed $34 billion capital plan for building projects including roads and school.

He wants the House to do the same.

“For me to sign this budget would be lying to the people of Illinois,” Blagojevich said, calling it $2 billion out of balance. “It’s unconstitutional. It’s irresponsible. It’s misleading. It makes all kinds of promises it can’t keep. And you’d have to be out of your mind to sign a budget like that.”

“If the House fails to pass the … bills that the state Senate passed to pay for the spending that both of the chambers supported, or to pass alternative ways to pay for the spending, they will be responsible — they will be responsible — for the $1.5 billion in reductions that I might be forced to make,” the governor added. “These actions will have consequences to real people.”

Brown said the flaws that caused the House not to pass the revenue bills remain, and “until those are corrected or alternatives are provided, I don’t envision much happening.”

On expanded gambling to help fund the capital plan, Brown said, “You can’t … realistically think you’re going to approve a plan where the goose that lays the biggest golden egg, being the city of Chicago, is opposed to both” a $500 million cost to start a casino in Chicago and “the lack of safeguards on how the projects are distributed.”

On the proposed $16 billion bond issue, Brown questioned if the pension systems would support “trying to pour $16 billion into a bad stock market.” And, he said, when the governor was successful in getting the legislature to approve a $10 billion pension bond in 2003, the ensuing transactions, including a fee of more than $800,000 to the adviser of one underwriter, “raised huge question marks.”

“I don’t think anybody in the legislature in their right mind is going to support a … do-over on this without knowing every aspect of every part of the transaction and who is making every dime of the fee, down to the janitor sweeping up the floor,” Brown said.

He also said fund sweeps of recent years have led to costly lawsuits.

“I think before the legislature were to engage in another big fund-sweep program, we would want to know who would file what lawsuits when,” Brown said.

$1.5 billion in cuts

Blagojevich and his staff outlined large, though unspecific, cuts, including $260 million from social services, $106 million from senior and veterans programs and $255 million from economic development and transit.

While his news release stated that one area jeopardized would be “teaching our children,” Blagojevich told reporters in Chicago: “Elementary and secondary education, preschool, I think they’ll do all right here, in spite of all of the challenges. We’re going to protect most of that.”

But he also said earlier, “If you support funding for social service programs, if you support funding education and welfare, if you believe as I do that we need to stimulate our economy and create jobs and put 600,000 people to work (with a capital plan), then lend your voice and ask the House leadership to pass the bills the Senate passed.”

The governor said the budget sent to him includes nearly $1 billion in new spending, and that would be the first to go if he’s forced to cut.

“It’s the low-hanging fruit,” he said.

“Beyond that, of course, … we’d have to make reductions in other places. … But all this can be prevented by the House simply getting back to Springfield and take an afternoon and just pass the same sorts of bills that the Senate passed.”

Summer rerun?

Brown said he didn’t know if this summer would become a repeat of the special-session fest of last summer.

“I can’t predict what the chief executive will do,” Brown said. “I’m certainly not a psychiatrist, so I’m not capable of making that diagnosis. Time will tell.”

“I still don’t see us coming to town,” said state Rep. Raymond Poe, R-Springfield.

Poe thinks any cuts threatened by Blagojevich will be allowed to go through for now and lawmakers may decide to restore money after the Nov. 4 election when they return for the fall veto session.

Poe said he remains opposed to the $530 million sweep of restricted state funds and issuing $16 billion in bonds to pay off pension debt.

“When the governor came to the state, it was only $9 billion in debt,” Poe said. “With this, it would be up to $36 billion. I don’t think (voters) want us to mortgage the state.”

Poe agreed with an assessment by Rep. David Leitch, R-Peoria, that the two revenue bills would fail in the House if Madigan called them for a vote.

Dring said Cross support leasing the lottery to fund a capital bill “because of the great need for infrastructure projects to stimulate the economy.” Dring added that House Democrats involved in negotiations have indicated they weren’t willing to even call the $16 billion pension bill for a vote, so on that issue, a poll hasn’t been done of members of the House Republican caucus.

No-talk Democrats

Dring said he doesn’t think the public accepts the idea that the Democratic leaders who control state government aren’t even talking to allow them to “do what’s best for Illinois.”

He said Madigan and Senate President Emil Jones Jr. “worked … hand-in-hand” as co-chairs of Blagojevich’s re-election campaign in 2006.

“Maybe they should use that kind of cooperation they had … to work on an issue like a jobs bill,” Dring said. “That would be an idea we’d like to see happen.”

“I urge the House to work to pass the revenue bills sent to them by the Senate in order to avoid cuts to the spending plan that the governor will be forced to make unless they take action,” Jones said in a statement. “The House knew when it did not pass the revenue bills that they were playing a dangerous game in which the people of Illinois could lose.”

Because it is past May 31, any legislation that takes effect for the fiscal year beginning July 1 will need a three-fifths majority, which means some Republican votes must help reach the 71 needed in the House, where there are 67 Democrats. The 37 Senate Democrats provide one more vote than the 36 needed to provide a three-fifths vote in the upper chamber.

Doug Finke contributed to this report. Bernard Schoenburg can be reached at (217) 788-1540 or bernard.schoenburg@sj-r.com.

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